In the British Columbia general election of May 2017, the incumbent Liberals elected a plurality of members to the legislature (43). The NDP won fewer seats (41) but, with the support of the small Green contingent (3), an NDP-Green government has come into office. In this section, we present two articles on two very different priorities for the new government: pursuing electoral reform and deciding the fate of the Site C dam.

Electoral reform

For predictable reasons – they won 16.8 per cent of the popular vote but only 3.4 per cent of the seats – the Greens are very keen to introduce some form of proportional representation and scrap the present “first past the post” electoral system. In principle, the NDP is also in favour, but being in office they lack the Greens’ fervour for changing an electoral system that brought them to power.

Following the 2001 provincial election, B.C. was in a similar situation inasmuch as the victors (the Liberals) held all but two seats; the formerly incumbent NDP won only two, a gross underrepresentation relative to its 22 per cent popular vote. The Liberals agreed that a citizens’ assembly could decide on an alternative voting system, which would be adopted if approved in a future referendum. The assembly recommended the single transferable vote (STV), a complicated form of proportional representation that failed the Tim Horton’s test. Within the length of time it takes to drink a cup of coffee, no one can explain how STV works. Nonetheless, STV was twice put to a referendum. In the 2005 referendum, support came close to the 60 per cent threshold set for adoption. After another four years of discussion at Tim Horton’s, support for STV in the 2009 referendum collapsed. The status quo has prevailed.

David Moscrop has written an excellent article summarizing the recent history of electoral reform in B.C. and the prospects for changing the electoral system in the near future. To accelerate the process of deciding between multiple alternatives, the government has hinted that it will adopt an alternate vote referendum whereby voters rank alternatives (including first past the post). The winner depends on iterative counting. First, votes are ranked based on first choices; the bottom option is dropped and its second choices reallocated. The process continues until one option gains 50 per cent support. Moscrop’s prediction: first past the post will survive this exercise and remains as our electoral system.

In my own view, the great virtue of our present electoral system is that, usually, it generates majority governments able to govern. Furthermore, when a plurality of voters converges in support of some other party, the next election gives the boot to the incumbents. That is often a useful form of accountability. However, very large deviations between distribution of seats in a parliament and in popular vote are undesirable. They lead to public disengagement from politics and suppression of important currents of public opinion. I would like a small dose of proportionality in the form of, say, 10 per cent of the seats in the legislature devoted to topping up the most underrepresented parties. Most elections would continue to yield majority governments.

Proportional representation is guaranteed, almost always, not to produce majority governments. Advocates believe this incentivizes politicians to learn the art of compromise. Admittedly, in northern Europe with relatively high rates of “social trust,” proportional representation and multiparty coalition governments work fairly well. In southern Europe, where trust is lower, coalition governments don’t work well.

Worth noting, the most adamant opponent of the Site C dam and the least willing to acknowledge any benefits from the project is the small Green caucus. The Green Party ran an online petition, which invited readers to endorse the following statement: “The Site C Dam is environmentally, economically and socially reckless. Add your name to demand Christy Clark halt construction on Site C so we can vote on it at the ballot box in election.” If multiparty government encourages compromise, the Greens don’t seem to have got the message.

Site C Dam

Ten years ago, I wrote a whimsical article comparing the elites of Alberta and British Columbia. The Calgary elite wanted to run Canada, and in 2007 was doing so under Stephen Harper. By contrast, the Vancouver elite was Canada’s Candide, content to cultivate its west coast garden and leave running of the country to others. Ten years on, the Calgary elite is not running Canada and is feeling sorry for itself because oil prices have fallen, tar sands development has stalled, and no major pipeline to either the Atlantic or the Pacific is under construction.

On the other side of the Rockies, British Columbians have not much changed. Few want to run Canada. Whether the now deceased Social Credit, the Liberals or the NDP have held office in Victoria, the Vancouver elite primarily worries about its garden.

In addition to legitimate concerns over the potential damage from pipeline leaks or run-aground oil tankers discharging their cargo onto a pristine coast, B.C.’s Candide syndrome is evident in attitudes toward the Site C dam. Along the Peace River in northeastern B.C., this dam is currently under construction on the third site on the river able to generate substantial electricity. (The estimated power to be generated is roughly 10 per cent of domestic B.C. consumption.) On the first two sites, dams were in place by 1980. Ever since, whether to build Site C has been a subject of simmering, now aggressive, debate.

Bypassing a protracted review by the provincial utility commission, the previous government authorized construction in 2014. To date, the publicly owned utility BC Hydro has spent over $2 billion, leaving $7 to $8 billion as cost to complete. Most (but not all) First Nation communities have opposed the project, as have the major environmental groups, whose supporters are largely urban. A typical position of environmental groups is that of the Sierra Club: “Site C is bad for B.C., and … residents don’t want to pay $9 billion to destroy an important and beautiful river valley for energy we don’t need.” The most prominent supporter of completion has been the provincial labour movement: Site C construction is generating more than 2,000 well-paying construction jobs, which would continue until 2024, the projected completion date.

The fate of Site C became the most prominent issue in the recent provincial election. The Liberals vowed to complete the project; the Greens adamantly opposed it. The NDP faced internal divisions between union supporters and urban environmentalists, but tilted toward cancellation. I recall a boisterous anti–Site C election rally organized by a coalition of environmental groups in a park in East Vancouver. The rally’s centrepiece was a large inflated white elephant labelled Site C. When a rally organizer asked me to sign the anti-Site C petition she was circulating, I declined, which prompted a shocked look of severe moral disapproval.

In office, one of the first initiatives of the new government was to order a quick review by the BC Utilities Commission, with a November 1 deadline.¹ The Commission confirmed that BC Hydro had spent more than $2 billion to date. It predicted a cost overrun that could amount to $1 billion, potentially raising the cost to complete to $8 billion. In the case of cancellation, it predicted the cost of remediating the dam site at nearly $2 billion. The first implication of cancellation is that it implies ratepayers absorbing substantial “sunk” costs of nearly $4 billion on an abandoned dam site and remediation of the river valley.

In his article in this section, Marvin Shaffer estimates the present value at the date of completion (in 2024) of the power generated over the first 60 years of the dam to be in the range of $9 to $10 billion.² He assumes that power surplus to B.C. needs would be exported, either to Alberta or the United States, at the low end of the forecast price range of both BC Hydro and the Commission consultants (Deloitte). Further, Shaffer writes,

If Alberta and B.C. were a single province, there would be no issue about the need for Site C. Its development, combined with increased intertie capacity, would serve as an important component of the Alberta government’s commitment to phase out coal-fired thermal power production and thereby dramatically reduce GHG emissions in the electric sector.

If we allow the reduction in Alberta greenhouse gases that Site C would enable as a benefit of completing the project, then the present value benefits of completion are higher than $9 to $10 billion. Valuing the avoided greenhouse gas emissions at $50 per tonne of carbon dioxide equivalent adds another $1.4 billion to the benefits.³ A key feature of Shaffer’s article is the recommendation to establish a Peace River Trust, analogous to that accompanying development along the Columbia River. To compensate First Nations and others for damage done to the river valley, the trust should be generously funded and its priorities should be defined locally.

The Commission acknowledges that BC Hydro can export Site C power in the early years, but is extremely pessimistic in its estimation of export prices. Furthermore, it makes no allowance for the potential benefit of accelerating decarbonizing of electricity generation beyond B.C. Instead, the Commission undertakes extensive analysis of the potential for soft options (demand side management and wind) that could substitute for Site C power in the case of cancellation (see figure 1, taken from the Commission report). Here, the Commission is very optimistic – optimistic that rate adjustments can dramatically reduce domestic demand and that the cost of wind power will substantially decline over the next decade. Based on pessimistic assumptions about cost to complete Site C, pessimistic assumptions about the value of Site C exports and optimistic assumptions about a portfolio of alternative technologies, the Commission concludes that the present value of costs for completion of Site C and the present value of costs for cancellation of the dam and pursuit of alternative technologies are similar.

I grant that the Commission may well be right about the cost to complete Site C and the cost of remediation if Site C is cancelled. And the Commission’s implicit recommendation to pursue demand-side management and wind power makes sense, provided it is treated as a supplement to, not a substitute for, Site C power. The scepticism that the Commission displayed over BC Hydro’s Site C revenue and cost projections should equally be applied to the potential for “soft” alternatives like solar and wind to generate large supplies of energy at costs below Site C. Obviously, in projections of costs and benefits over 60 years, there is much uncertainty.

The costs of climate change are beginning to mount. The forest area burned in B.C. during the summer of 2017 set a new record. Record fire damage occurred in many western American states. The damage from this season’s hurricanes in the Caribbean were at near-record levels. If we extend the discussion beyond B.C. borders, the need for non-carbon sources of energy is urgent. Site C could make a modest but nonnegligible contribution to decarbonizing the continent’s energy system.

I return to Voltaire and Candide. Despite ominous signs, B.C. environmentalists are content to describe Site C’s potential production of non-carbon-based power as “energy we don’t need.” Sometimes we need to look beyond our garden.

Click to read John Horgan’s Site C Problem by Marvin Shaffer.

Notes

¹ The final report of the BC Utilities Commission on Site C is available at http://www.sitecinquiry.com/wp-content/uploads/2017/11/11-01-2017-BCUC-Site-C-Inquiry-Final-Report.pdf

² The present value calculations entail discounting actual amounts at a discount rate of 4 per cent. Calculations available from the author on request.

³ This calculation is the present value of greenhouse gas reductions in Alberta, on the assumption that all Site C power is exported to Alberta for a period of ten years, discounted at 4 per cent.